The Enforcement Directorate (ED) has arrested a former Director of Andhra Bank in its ongoing money laundering probe in the alleged Rs 5,000 crore bank fraud case involving Gujarat-based pharmaceutical company Sterling Biotech, an official said on Saturday.

Anup Prakash Garg was arrested after day-long questioning on Friday under charges of the Prevention of Money Laundering Act (PMLA), the official said.

Both the ED and the Central Bureau of Investigation (CBI) had named Garg in their criminal cases as an accused. The ED initiated a money laundering probe in the case taking cognisance of CBI FIR in the case.

The ED said it found during probe that "certain entries" in a diary seized by the Income Tax Department in 2011 showed various cash payments amounting to Rs 1.52 crore made to one "Garg, Director, Andhra Bank" between 2008-2009 by the Sandesara brothers.

"Various cash payments were made to Garg, as reflected in the said entries, on the instructions of Sandesara brothers, by withdrawing cash from the bank accounts of several benami companies of the Sandesara brothers," it said.

The financial probe agency alleged Garg of infusing several crores of rupees of his unaccounted cash in various companies through many Kolkata-based bogus shell companies with the help of cash or cheque entry operators in Kolkata to launder the proceeds of crime obtained by him from the Sandesaras.

In November last year, the ED arrested a Delhi-based businessman Gagan Dhawan in connection with the case.

Sterling Biotech had taken loans of over Rs 5,000 crore from a consortium of banks led by Andhra Bank which had turned into non-performing assets. A total pending dues of the group companies were Rs 5,383 crore as on December 31, 2016, alleged the CBI FIR.